European banks and pension funds fuel land grabs in Uganda

21 May, 2013

KAMPALA (UGANDA) / BRUSSELS (BELGIUM) May 21, 2013 – European banks and pension funds are funding palm oil giant Wilmar International, a company implicated in land grabbing in Uganda, according to new research released today. [1]

British, Dutch, French and German banks give over one billion euros of financial assistance to Wilmar and European and American financial institutions own shares in the company worth 621 million euros.

Wilmar International is one of the largest oil palm plantation owners and refiners in the world and was ranked as the world’s worst company in terms of environmental performance by Newsweek magazine in 2011 and 2012. [2]

New research from Friends of the Earth International links Wilmar’s subsidiaries on Kalangala Island, Uganda to land-grabs and violations of both national laws and environmental legislation.

Communities in Kalangala living and working on land acquired for palm oil plantations have been displaced, often with no compensation or alternative livelihood options. About 3,600 hectares of forest have been destroyed, negatively affecting the environment and livelihoods of local people.

Communities also complain of rising food insecurity on the island since large areas that formerly produced food crops for local consumption have been converted to oil palm.

“European banks and pension funds are stimulating land grabbing, which is destroying thousands of communities worldwide. The financial sector must take responsibility for their activities and ensure their investments respect human rights and abide by local environmental regulations.”

In Nigeria and Indonesia Wilmar is being investigated by a certification body, the Round Table on Sustainable Palm Oil, for causing deforestation and violating community rights.

The major financiers of Wilmar International in Europe are HSBC (€877 million), BNP Paribas (€241 million), Deutsche Bank (€24 million) and Rabobank (€222 million) as well as Dutch pension funds ABP and Pensioenfonds Zorg en Welzijn which own shares in Wilmar.

The Government of Uganda and United Nations agency International Fund for Agricultural Development also back Wilmar's oil palm project in Uganda but have failed to adequately assess its negative consequences for local people.

Friends of the Earth Uganda campaigner David Kureeba said: “The Government is responsible for protecting its citizens and it must stop facilitating forced purchase of land for investors.

Investors also need to push Wilmar to clean up its act, or put their money elsewhere. Wilmar and its subsidiaries, backed by European money, are forcing communities from their land in Uganda.”

Friends of the Earth International is calling on financiers of Wilmar to pressure the company to clean up its operations, or consider divestment. European banks and pension funds should not be contributing to land conflicts with local communities, to deforestation, or funding companies who violate national laws.

The campaigning group is asking Wilmar and the Government of Uganda to stop land-grabbing, return land taken from communities and ensure that any future development abides by national laws and free, prior and informed consent from affected communities. The Government of Uganda should respect the Uganda Land Act and not allow compulsory acquisition of land for investments.

Palm oil is commonly used in agrofuels, which is putting growing pressure on land, food and forests. European countries have set targets and subsidies for agrofuels, to meet EU renewable energy goals, but these targets have driven the expansion of plantations overseas. Legislation on agrofuels is currently being debated in the European Parliament and Council. Friends of the Earth Europe is urging the EU to cap and then reduce to zero such fuels, as well as introduce full carbon accounting to prevent high carbon fuels like palm oil biodiesel from being sold in Europe.